Three certainties Flashcards
What are the three certainties?
- certainty of intention
- certainty of subject matter
- certainty of objects
What is the requisite intention for certainty of intention?
intention to assume/impose a duty which is a characteristic of a trust
How can an intention to create an express trust be shown?
By words or conduct
What approach do courts use when ascertaining an intention to create an express trust?
Objective
What can be a good indicator (but not conclusive) of an intention to create a trust?
- use of word trust
- segregation of funds
What element is likely to show no intention to create a trust?
Vagueness
What are the two requirements for certainty of subject matter?
- Trust property requirement
- Beneficial entitlement requirement
When may it be difficult to identify trust property?
- identified by description
- identified out of a larger mass
Is there certainty of subject matter where the trust property is a fractional interest?
Yes
Is there certainty of subject matter where the trust property is a a specific number of items out of larger mass?
Yes if which ones are identified
When can a trust not be formed where the property is identified as a specified amount of a larger bulk?
Tangible assets
When can a trust be formed where the property is identified as a specified amount of a larger bulk?
Intangible, fungible assets
Is ‘reasonable income’ sufficient to show beneficial entitlement?
Yes
When may there be no certainty of beneficial entitlement?
Where there is a decider - they may die/become unable to choose
Which type of trust needs the most certainty of objects?
Fixed trusts
Will a fixed trust fail if there are multiple beneficiaries and some are uncertain beneficiaries?
No - where a beneficiary’s interest doesn’t rely on an uncertain beneficiary, they can still take their interest
What is the complete list test?
Where trustees required to distribute property equally between a class of beneficiaries, must be able to draw up a complete list of beneficiaries
What are the two further certainty requirements where the complete list test is involved?
- conceptual certainty: language used to describe class
- evidential certainty: evidence to enable identification
What certainty test is required for powers of appointment?
Certainty of objects - whether someone is/is not a member of the class
What are the certainty of objects tests requirements for discretionary trusts?
Carry out a survey of class depending on size
* No need for complete list – is/is not test satisfies
* Conceptual certainty still a requirement
What was the test in Re Baden regarding whether someone was a beneficiary of a discretionary trust?
If they can’t prove they’re within the class, they are considered outside of it
When may a discretionary trust fail due to the class of objects?
Administrative unworkability if the class is too wide
What is the consequence where the three certainties are not satisfied and the property has not been transferred, for an inter vivos arrangement?
No change in beneficial ownership
What is the consequence where property has been transferred to a trustee but there is no certainty of intention to create a trust, for inter vivos arrangements?
Presumed resulting trust (unless presumption can be rebutted)
What is the consequence where property has been transferred to a trustee and there is certainty of intention to create a trust, for inter vivos arrangements?
Automatic resulting trust
What is the consequence for testamentary arrangements where there is no certainty of intention to impose a trust?
Gift
What is the consequence for testamentary arrangements where there is certainty of intention but no certainty of subject matter or objects?
Provision fails and property falls into residue